Bookkeeping Basics for Small Business Owners

On average, small business owners spend 10 hours each week recording, organizing and processing financial transactions everything from accounts receivable and payable to employee payments, expense receipts and supplier invoices. While the process may be time consuming and tedious, effective effective bookkeeping is the foundation of sound financial management, which in turn is the lifeblood of your business. Feeling overwhelmed by mountains of paperwork and complex calculations, Here are three bookkeeping basics to help ensure a healthy financial future for your small business. Faithfully Track expenses Accurate and consistent expense tracking is crucial for claiming tax deductions and lowering your overall tax bill. Plus, analyzing expenses can offer crucial insights into spending patterns and the overall profitability of your small business. Small business owners should consider using a mobile app for simple, consistent expense tracking. Options like Expensify and Receipt bank help. Do away with manual data entry with automated functions Receipt data capture via your smartphone's camera no need to hold onto paper receipts, which can get lost or misfiled Synchronization with your phone's GPS to track mileage of business, travel and importing bank and credit card data, plus integration with accounting software. Systematic Invoicing and Filing Efficient invoicing is about more than ensuring you get paid in a timely fashion. An invoice is an official record of the terms of each transaction and must be completed accurately to avoid errors in your bookkeeping process. Here are a few tips for professional Ensure each invoice includes all the important details contact information, a tracking number, a detailed list of products or services rendered and a breakdown of the total amount due. Provide an electronic receipt to reduce waste and create a paper trail if there's ever a dispute and Maintain an invoice filing system that records when you sent the invoice to whom, when payment was made and any reminders sent out. An online invoicing tool can streamline this aspect of your bookkeeping process and provide an efficient backup filing system. Save time with accounting Software by law, every business is required to keep organized and timely financial records. However, manually posting income and expenses to ledgers and journals is time consuming, not to mention stressful. For the math averse. Shave some time and stress off your weekly bookkeeping with an all in one accounting software solution like Xero Books, Clear Books, or Cash Flow. Online bookkeeping offers numerous advantages such as instant reports and real time insights on profits and loss, customer accounts, payroll and your overall financial big picture. Simplified data entry so you can collate and print invoices, purchase orders and payroll much faster than with manual methods and improved accuracy through automation. Once data is entered, the software handles all subsequent calculations and processes, including invoicing. When it comes to accounting, vigilance is the key to mitigating risk and ensuring the long term profitability of your small business. Be sure to set aside time each day, week and month to update and review your books to catch any red flags and ensure your finances are on track.